Tesla is the most shorted stock on Wall Street: and short sellers just took a big hit.

Tesla has continued to prove as one of the most volatile car manufacturers in the industry, but that hasn’t stopped investors from pouring money into the company, leading it to become the most valuable American car brand on Wall Street. Yet such volatility has also stirred up a more speculative aspect of the stock market: short sellers.

If you’re unfamiliar with the concept, here’s essentially what they are: short sellers borrow stock from a lender and sell it at its current market price. After borrowing, they sell the stock and buy it back when the price goes down, which nets them a profit. In other words, Short sellers are betting against a company – they’re assuming the value will go down over time.

“It’s called a short sale because you are taking a short position, meaning you stand to benefit if the price of the asset decreases,” said Luke Honold, a fourth-year finance, investment and banking student at UW-Madison. “If the price decreases, the cost to replace the borrowed asset is less, which makes the short seller money.”

With Tesla Inc. rated as a volatile stock in markets while burning through cash, struggling to meet production targets, and managing a CEO with a polarizing Twitter page – it’s no wonder there are so many investors willing to bet against the company.

And yet, despite the likelihood that these short sellers could be right in the long run, Tesla seemingly stunned everyone last quarter; the company posted a profit for the first time since 2016. This is not just surprising because of their track record of losing money, but they even beat projections that said they would only break even.

After the company announced this, shares climbed 12 percent in premarket trading, which further impacted short sellers. Tesla now holds a market value of $50 billion, above even the likes of General Motors, which produced 9.6 million cars last year, compared to Tesla’s 100,000 in 2017. With such a high market capitalization, many short sellers assert that the company is greatly overvalued, but some have actually changed their outlooks.

Andrew Left, an active short seller of Tesla, has recently reversed his position on the company following the recent successes of the Model 3. While Left expected that several other companies would release strong competition for the Model 3 before it came to market, sales are still showing a high demand for the product. Left summarized his recent reversal in his investment newsletter, Citron Research:

“While the media has been focused on Elon Musk’s eccentric, outlandish and at times offensive behavior, it has failed to notice the legitimate disruption of the auto industry that is currently being dominated by Tesla.”